China’s economic growth sinks to 28-year low
Analysts believe conditions are likely to get worse before they get better
BEIJING: China's economic growth cooled slightly in the fourth quarter from a year earlier as expected, weighed down by weak investment and faltering consumer confidence as Washington piled on trade pressure, leaving last year's growth the weakest in 28 years.
Signs of more cooling in China are stoking worries about risks to the world economy and are weighing on profits for companies from Apple to big carmakers.
Fourth-quarter gross domestic product (GDP) grew at the slowest pace since the global financial crisis, easing to 6.4 per cent from 6.5 per cent in the third quarter, data from China's National Bureau of Statistics showed yesterday.
Analysts polled by Reuters had expected 6.4 per cent.
That left full-year growth at 6.6 per cent, the slowest rate of expansion China has seen since 1990. Analysts polled by Reuters had expected it to cool to 6.6 per cent from a revised 6.8 per cent in 2017.
Weakening activity and signs of rising unemployment underline a need for more economic support measures as Beijing wrestles with the US over trade.
Chinese policymakers have pledged more support this year to reduce the risk of a sharper slowdown, but they have ruled out a "flood" of stimulus like Beijing has unleashed in the past, which quickly juiced growth rates but left a mountain of debt.
With support measures expected to take some time to kick in, most analysts believe conditions in China are likely to get worse before they get better, and see a further slowdown to 6.3 per cent this year.
On a quarterly basis, growth eased to 1.5 per cent in October-December from 1.6 per cent in the preceding period. Analysts had expected 1.5 per cent. Some analysts believe China's actual growth levels are much weaker than official data suggest.
December data released along with GDP painted a mixed picture of the economy at the end of the year, with factory output picking up unexpectedly while investment and retail sales continued to languish.
Industrial output grew 5.7 per cent last month from a year earlier, beating expectations of 5.3 per cent and accelerating from 5.4 per cent in November despite weaker exports.
Fixed-asset investment rose 5.9 per cent last year, missing expectations of a 6 per cent increase and the slowest annual growth since at least 1996.
Retail sales rose 8.2 per cent last month on-year, in line with forecasts. But the pace was only slightly better than November's 8.1 per cent, and it is still hovering near 151/2 year lows.
A surprising contraction in December trade data last week and weak factory activity surveys have suggested the economy cooled more quickly than expected at the end of last year, leaving it on shakier footing.
Sources have said Beijing was planning to lower its growth target to 6 per cent to 6.5 per cent this year from around 6.5 per cent last year. Even if the two sides agree on a trade deal, analysts said it would be no panacea for China's economy unless it can turn around weak investment and credit growth and keep a wobbly property market on its feet. - REUTERS